Tuesday, December 13, 2011

The downside of price cuts (for an existing owner)

The downside of price cuts (for an existing owner)

Yes, price cuts are benefitial to the company and paves way for more sales. Price cuts bring the vehicle into the bracket of people with lesser budgets.

Now lets look at the price-drop from an owner's perspective who has just paid top dollar for his motor before the price-cut. Lets take the case of the Honda Jazz, the most widely known car for its price drop. Aria joins the bandwagon now. If you are owner who have purchased a honda jazz at "pre" price-cut prices, what all do you lose ?
  • The more a car is priced the more "exclusive" it is. (False Prestige)
  • More buyers buy the car after a price cut so it becomes a "common" car.
  • You lose on resale value by at least 2 lacs if you send it to a 2nd hand market.
  • Attitude at dealer and workshop changes when many bookings are registered.
  • Frustration builds up for paying "more" as an initial patron.
  • Jealousy at the other man as he would be paying a lower emi for a lesser tenure, while we would be paying a higher emi for a longer tenure.
  • No more an "aspirational" car
  • Lower priced version "May" appeal to taxi segment. (11.25 lacs OTR for Aria basic)
Please feel free to add points to this if any. This thread is aimed at venting the feelings of someone who has borne the brunt of a price cut of his favorite car. This is not targetted at any specific brand / Manufacturer and also not focussed on bashing any manfacturer.

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